Title 101

Title 101

WHAT IS TITLE INSURANCE?
It is protection against loss if a covered defect is found in your title. When you buy a home, you are given a title to the property, which generally means you receive full legal ownership. Sometimes, however, there may be a hidden mistake in a prior deed, will, mortgage etc. that may give someone else a valid legal claim against your property.

WHY IS TITLE INSURANCE IMPORTANT?
It provides a “safety fence” around your property. When you buy property, you are commonly required to buy title insurance. This covers the outstanding balance on the mortgage for the lender, but does not protect you. When acquiring property, it is a good idea to get your own title insurance policy. It will give you maximum protection in case there’s a claim against your home.

HOW CAN THERE BE A TITLE DEFECT IF THE TITLE HAS BEEN SEARCHED AND A LOAN POLICY ISSUED?
Title insurance is issued after a careful examination of the public records. But even the most thorough search cannot absolutely assure that no title hazards are present. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search.

WHAT TITLE INSURANCE PROTECTS AGAINST
Here are some common hidden risks that can cause loss of title or create an encumbrance on title:

  • False impersonation of the true owner of the property
  • Forged deeds, releases or wills
  • Undisclosed or missing heirs
  • Instruments executed under invalid or expired power of attorney
  • Mistakes in recording legal documents
  • Misinterpretations of wills Deeds by persons of unsound mind
  • Deeds by minors
  • Deeds by persons supposedly single, but in fact married
  • Liens for unpaid estate, inheritance, income or gift taxes
  • Fraud

WHAT PROTECTION DOES TITLE INSURANCE PROVIDE AGAINST DEFECTS AND HIDDEN RISKS?
Title insurance will pay for defending against any lawsuit attacking the title of the insured, and will either clear up title problems or pay the insured’s losses. An insured is an owner, lender or a party having and interest in Real property. For a one-time premium, a title insurance policy remains in effect as long as the insured, or the insured’s successors or assigns, retain an interest in the property, or have any obligations under a warranty in any conveyance of it. Owner’s title insurance, issued simultaneously insuring the lender through a loan policy, is the best title insurance value a property owner can get.

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